Winning in a changing market

Transcription

1 Winning in a changing market Capital Markets Day 15 December 2016 Per Strömberg, CEO ICA Gruppen

2 Winning in a changing market We have a strong foundation for future growth Rapidly changing retail market Clear strategy to deliver on our targets 15/12/2016 ICA Gruppen CMD

3 Many structural changes delivered in the past three years DIVESTMENTS: Kjell & Co, 2014 Forma Publishing Group, 2014 ICA Norway, 2015 Cervera, 2015 Apotek Hjärtat, B-2-B, 2015 inkclub, 2016 ICA Real Estate Norway, 2017 ACQUISITIONS: Apotek Hjärtat, 2015 Hemtex (Acquisition of minority shares, now wholly owned), 2015 NEW BUSINESS: ICA Insurance, /12/2016 ICA Gruppen CMD

4 ..have been an important driver of EBIT improvement since 2012 EBIT-margin excl. non-recurring items 2.7 % 2012 EBIT-margin excl. nonrecurring items Q (R12) 4.4 % Divestments Acquisitions Improvement ICA Norway 0.6 pp Apotek Hjärtat 0.4 pp ICA Sweden 0.5 pp Kjell & Co, Forma, Cervera 0.0 pp Rimi Baltic 0.2 pp Other 0.0 pp 15/12/2016 ICA Gruppen CMD

5 ..and have led to ICA Gruppen s current structure Grocery Non Food Real Estate Bank & Insurance Pharmacy 15/12/2016 ICA Gruppen CMD

6 Well positioned for continued growth A very strong position in our core businesses Clear #1 in Sweden with good business momentum and high margins #2 in Rimi Baltic with leading position in Latvia and increasing market share in Estonia and Lithuania Strong and improving #2 position in the Swedish pharmacy market Excellent brand positions across the group High quality retail real estate portfolio in Sweden, well positioned to further strengthen the store network ICA Bank s +700,000 customers provide a good base for future growth Strong cash flow and balance sheet to fund further business growth and business development 15/12/2016 ICA Gruppen CMD

7 Delivering on our strategic priorities 2016 CREATE GROWTH CUSTOMER EXPERIENCE Provide a great offering, value for money, a strong store network and a personal, omni-channel experience BRAND & LOYALTY Strengthen customer relationships through leading brands, loyalty programs and CRM 1. Ensure competitive pricing and fair price perception 2. Build ICA s overall health offering and position 3. Strengthen the Non Food offering, leveraging Hemtex 4. Build a leading omni-channel offering across OpCos and platforms 5. Further strengthen our position in the Baltics 6. Develop leading CRM and build a common Swedish loyalty program SIMPLICITY Drive efficiency throughout the value chain 7. Drive efficiency throughout the value chain, with focus on store operations and digitalisation 8. Improve IT development through closer business integration and new ways of working ENABLE GROWTH PEOPLE Engage and develop our people in a fast-moving and diverse organisation 9. Integrate ICA s common values and improve talent management SUSTAINABILITY Create customer engagement and responsible, climate-neutral operations 10. Drive sustainable customer choices and climate-smart operations 15/12/2016 ICA Gruppen CMD

8 Delivering on our strategic priorities in 2016 Invested in Private Label pricing, ( Nytt lägre pris ) New pricing strategy Apotek Hjärtat online Grown online sales in the retail business. +46% in Grocery (Q3), +117% in Pharmacy, CDO in place (Chief Digital Officer) Grown market share in Rimi Baltic, +0.5pp Launched common loyalty program for ICA Sweden, ICA Banken and Apotek Hjärtat 15/12/2016 ICA Gruppen CMD

9 Delivering on our strategic priorities in 2016 Leading way of working (LEAN) scaled up in stores Introduced agile development in several areas (ICA Bank, ICA Sweden, marketing) ICA Values rolled out and fully embedded On track to reach 2020 climate neutrality target (focus transportation and cooling) 15/12/2016 ICA Gruppen CMD

10 Continuing to strengthen sustainability to meet stakeholder demands ICA Gruppen won the UN Momentum for Change award during COP22 for the project Klimaträtt (Climate Right) Chief Corporate Responsibility Officer appointed in Q3 to the executive management team New sustainability committee at board level 15/12/2016 ICA Gruppen CMD

11 ICA Real Estate supporting urban growth, Norwegian divestment completed Agreement signed for divesting Norwegian properties Transaction to be finalized Q SEK billion cash-flow 400 MSEK capital gain Stable EBIT development Focus ahead: Continue to develop attractive locations Implement urban strategy Land & property banking, larger project scope EBIT* excl. non-recurring items, MSEK Q3 R12 *Excluding real estate in Norway 15/12/2016 ICA Gruppen CMD

12 ICA Bank Actions show result, underlying improvements coming through Operational environment difficult in 2016 Many mitigating actions have been implemented and should reverse trend in coming years ICA insurance off to a good start and follows plan but not yet contributing to profits Improved customer loans and mortgage offering Continue launch of ICA Bank Corporate services EBIT excl. non-recurring items, MSEK Q3 R12 15/12/2016 ICA Gruppen CMD

13 Hemtex in a transition phase Profit level clearly not satisfactory Market conditions: Moderate growth for the home textile market Increasing competition Online sales growing quickly New strategy/actions Clearer assortment and pricing strategy New store concept Develop omni-channel & e-commerce Reduce overhead and improve efficiency in stores EBIT excl. non-recurring items, MSEK Q3 R12 Net sales EBIT excl non-recurring items 15/12/2016 ICA Gruppen CMD

14 Three dominant forces affecting retail Changing face of the consumer Advancements in technology and innovation Structural industry shifts 15/12/2016 ICA Gruppen CMD

15 Changing face of the consumer Urbanization centralizes shopping Millennials early adopters of new technology and shopping habits Migration and growing minorities drive new assortments 15/12/2016 ICA Gruppen CMD

16 Structural industry shifts Optimize portfolio and formats towards growing channels Consider M&A to reach scale and improve cost position Technology changes require finding new talent 15/12/2016 ICA Gruppen CMD

17 Advancements in technology and innovation Data to improve customer offering and customer experience Digitalization to improve processes and lower costs 15/12/2016 ICA Gruppen CMD

18 Core areas to focus on and invest in Convenience 15/12/2016 ICA Gruppen CMD 2016 Digital transformation Price value 18 Health and sustainability

19 ...reflected in our 2017 Strategic Priorities CREATE GROWTH CUSTOMER EXPERIENCE Provide a great offering, value for money, a strong store network and a personal, omni-channel experience BRAND & LOYALTY Strengthen customer relationships through leading brands, loyalty programs and CRM 1. Ensure competitive pricing and fair price perception 2. Implement new strategies with strengthened customer offerings for Non Food, Hemtex and ICA Bank 3. Build a leading omni-channel offering across businesses and platforms 4. Strengthen store network and concepts with focus on urban areas, convenience and health 5. Further strengthen our position in the Baltics* 6. Develop leading CRM and leverage the common Swedish loyalty program SIMPLICITY Drive efficiency throughout the value chain 7. Drive reliability and efficiency throughout the value chain with focus on logistics and store operations 8. Improve speed and project delivery through new ways of working ENABLE GROWTH PEOPLE Engage and develop our people in a fast-moving and diverse organisation 9. Improve performance management process and change ability Create customer engagement and responsible, climate-neutral operations SUSTAINABILITY 10. Drive sustainable customer choices and climate-smart operations 15/12/2016 ICA Gruppen CMD

20 Strategic priorities 2017 Price perception and online 1 Ensure competitive pricing and fair price perception 3 Build a leading omni-channel offering across businesses and platforms 15/12/2016 ICA Gruppen CMD

21 Strategic priorities 2017 strengthen urban network and leveraging Swedish loyalty program 4 Strengthen store network and concepts with focus on urban areas, convenience and health 6 Develop leading CRM and leverage the common Swedish loyalty program 15/12/2016 ICA Gruppen CMD

22 Strategic priorities 2017 efficiency in focus 7 Drive reliability and efficiency throughout the value chain with focus on logistics and store operations 15/12/2016 ICA Gruppen CMD

23 Winning in a changing market We have a strong foundation for future growth Rapidly changing retail market Clear strategy to deliver on our targets 15/12/2016 ICA Gruppen CMD